Cotton candy prices settled down by 0.11% at 56460 due to profit booking after previous gains. The price increase earlier was driven by a significant decline in cotton acreage in key states like Punjab, Haryana, and Rajasthan, which collectively reported a reduction to 10.23 lakh hectares from last year’s 16 lakh hectares. Specifically, Punjab’s cotton area fell to 97,000 hectares, while Rajasthan and Haryana saw reductions to 4.75 lakh hectares and 4.50 lakh hectares, respectively.
Additionally, the delay in the arrival of shipments from the US and Brazil has spurred demand for Indian cotton from mills in neighboring countries, further supporting prices. The trade anticipates an increase in cotton acreage in Telangana, as some chili farmers are likely to shift to cotton due to weaker chili prices. The 2024/25 U.S. cotton projections show higher beginning and ending stocks compared to last month, with unchanged projected production, domestic use, and exports. Globally, the 2024/25 cotton balance sheet indicates increased beginning stocks, production, and consumption, with unchanged world trade. Consequently, world ending stocks are projected to be 480,000 bales higher than in May at 83.5 million. Adjustments to the 2023/24 world balance sheet include higher beginning stocks and production but reduced trade and consumption, raising ending stocks by approximately 500,000 bales.
Technically, the market is under long liquidation, with a 4.38% drop in open interest to settle at 306 while prices fell by 60 rupees. Currently, cotton candy finds support at 56070, and a break below this level could test 55670. On the upside, resistance is expected at 56880, and a move above this level could see prices testing 57290.